Martino could pay another $1.9 million to get out from under bankruptcy case

The 14-month drama that is Tom Martino’s personal bankruptcy case dragged along Tuesday with the radio talk show host duking it out with Bank of America over $13,000 in unpaid credit card bills.

About the only interesting thing during the five-hour hearing in U.S. Bankruptcy Court in Denver — other than Martino saying he’s likely to have to pay up to $1.9 million over the next two years as part of an as-yet-disclosed settlement agreement to be discharged in the case — was that Martino took his wife, kids and their nanny on a luxury vacation to the Cayman Islands in the time before filing for bankruptcy protection.

Martino, 59, also took his wife, Holly, on a luxury stay in New York City, too, where they racked up some hefty charges eating at some pretty nifty places while staying at the Palace Hotel in Manhattan, though Martino would only agree with Bank of America’s lawyer, who said that’s where they stayed.

It’s those charges that are at the center of the hearings.
Martino said he’s paid every one of his personal consumer credit card bills throughout the bankruptcy — except Bank of America’s two cards because they wouldn’t accept the payment in September 2011.

The bank, through attorney Bill Weinstein, said it didn’t because Martino tried to pay the outstanding amounts — he’s always paid his charge bills in full each month, according to the statements read in court — after he filed for bankruptcy. The bank said it violated federal bankruptcy rules in that one creditor would be allowed to collect while those holding $46 million in unsecured claims would remain in waiting, nearly all of them banks with real estate loans Martino personally guaranteed.

Martino’s lawyer, Stephen Berken, says there’s nothing to prevent Martino from paying off creditors as he chooses — the Bank of America credit cards were not initially listed among outstanding debts when he filed Chapter 7 protection — and Martino says the only reason Bank of America remains unpaid is its insistence he admit to having done something wrong.

Martino said he can pay, but wants Bank of America to apologize for suing him to collect; Bank of America said forget it.

So here they are, all four laywers, a federal bankruptcy judge (Michael Romero), a court recorder and a clerk for a squabble over $13,000 — which Martino said he could readily pay seeing as his monthly net income is about $113,000, with about $89,000 leftover when the bills get paid.

Details of Martino’s settlement deal with creditors and the trustee overseeing the case have yet to be filed with the court, but Martino did testify that he’ll have likely paid about $3.4 million when the case is closed. He paid about $1.5 million at the start of the case, about 25% of what he had in the bankd.

“That left me with few million dollars,” Martino said.

Berken was amused: “We should all have those problems.”

Another “moment” of the case with Bank of America was Weinstein’s effort at describing Martino and his radio show — the source of much of his income — by reading from a three-year-old federal appeals case opinion that upheld Martino’s victory against a jet ski manufacturer who had sued for defamation.

“The Tom Martino Show is a radio talk show program that contains many of the elements that would reduce the audience’s expectation of learning an objective fact: drama, hyperbolic language, an opinionated and arrogant host, and heated controversy,” U.S. District Judge Conselo Marshall wrote in the majority opinion of Gardner v. Martino for the Ninth Circuit U.S. Court of Appeals.

When asked about why he took the Cayman Island trip and stayed at the Ritz Carlton there rather than simply not spend the money while contemplating bankruptcy, Martino said he needed a break.

“My wife booked it some time before and I wanted to get away and we take vacations,” he said. “My intent was to pay the cards as usual.”

Martino typically charged — and paid — as much as $20,000 in one month on a single card. Bank of America remained unpaid because, Martino said, it refused to accept the payments.

Holly Martino, getting over the remnants of a cold, testified how she “didn’t want to lose my points” on credit cards the family used to pay all its bills.

“I put as much on it as I could for the reward points,” she testified. “That’s why I got them.”

The cards had limits of $50,000 and $25,000, she said. Berken later said there were more than 100,000 points on the cards.

Her offer to pay the cards on Martino’s behalf — she actually paid them off each month but in her husband’s name — was rebuffed by Bank of America. As were her offers to open her own accounts and transfer the balances from her husband to her cards.

“They said they couldn’t do that; that payment had to go through the bankruptcy court,” Holly said.

Credit cards typically are considered unsecured debt in a bankruptcy and discharged without being paid. But charges incurred in the 90 days before a bankruptcy petition is filed and which are deemed “luxury” and unnecessary spending of more than $600 can be considered for payment.

Martino said he had plenty of cash and the backing of an investor to pay off his flailing businesses — mostly parking lots and real estate developments — but one bank’s desire not to make a deal caused him to head to bankruptcy.

So why not just pay a $3.4 million court judgment given to Colorado Capital the very day the FDIC closed it and renegotiate the other deals with the investor’s backing, Weinstein queried Martino.

“I needed enough money to live on,” he said. “That would have left me with nothing. Under the law I afforded myself the protections of bankruptcy. I made a mathematical decision, not an ethical one.”

U.S. Bankruptcy Judge Michael Romero isn’t expected to rule on the Bank of America issue until January and what’s at issue isn’t the $13,600 in unpaid charges but, more likely, the attorney fees for arguing over it all.

I don’t understand how anyone with personal honor and integrity would spend that much on a vacation at the same time he owes $46 million to unsecured creditors. Why not at least try to pay down some more of the debt? These unsecured creditors are employers who have likely had to fire people or not give them raises due to Martino’s stiffing them. Sorry, but there’s no other way to put it: Martino has stiffed a lot of people. I like Martino’s show and usually like what the guy has to say, and sometimes people have no choice but to declare bankruptcy – but when you’re earning about $1.5 million a year you ought to be able to pay down quite a bit if not all of the $46 million before you retire.

andyandy

Does this mean we won’t get to see criminal charges? After what he did to me, public ridicule could never be enough to satisfy me. Tom Martino belongs behind bars, preferably in a small cell with Jerry Sandusky.

Owen

Do tell more, specifics please.

andyandy

He, and his referral list, vouched for a career criminal, who he had never even met. When things went bad, he didn’t lift a finger to help. The whole ordeal cost me many thousands of dollars, and wasted a year of my life in litigation. He wouldn’t even throw the bad guy off his referral list until after I had a court judgment, after which the perpetrator hid his assets, declared bankruptcy and laughed in my face- much like Tom Martino himself.

Don’t ever trust him or his referral list. It’s strictly pay-to-play, and a lot easier to get on than to get off.

retepc1

hmmm… wonder if there is someone, say with a radio show, who he could call for advice? sounds like a tough situation.

Owen

There a guy on 630AM @9am. Now he can be tough on callers, usually ridicules the really stupid or dishonest callers, but other then that he provides usually strong advice and anchors his assistance to “victims” by leveraging his media personality or side company of honest broker businesses.

andyandy

I liked him, and his show, just like you do, until the chips were down. Then I found out the hard way, what an amoral, narcissistic, avaricious, dishonest person that guy on 630 AM is. Don’t make the same mistake I did- never trust Tom Martino, or anybody on his referral list.

How is this dirt bag still employed? How is it that his blatant, fraudulent, illegal move of assets to his wife’s name has not landed them both in prison? How is it that $46 million is missing? Martino is making a joke out of the legal system.

NewsWire

Another Repuglycan piece of crap.

Dee

This man is a sleezeball.

I feel sorry for every single person who was duped by his “reliable” list as the reliable vendors PAID to be on it.

Every single channel that has paid him in the last 10 years should be ashamed and should air an apology to their viewers for supporting such a sl||t

Seven Burke

Martino is the biggest fraud ever to perpetrate the airwaves. He’s an absolute know-nothing who made a fortune slamming innocent companies. No time to shed tears for this loser. He’s been morally bankrupt for decades, and now this. What a loser.

Lee

Another way the wealthy get away with not paying their bills or their “fair share”! Him and his wife have played the system and is the courts going to allow this? Why not let this be an example to stop this from happening, let them learn what it is like to live within their means. Or is the courts going to just sweep this under the rug,,,,if they do it only shows that more and more people can continue doing this and we are ALL paying for this including the government.

Emilie Rusch covers retail and commercial real estate for The Post. A Wisconsin native and Mizzou graduate, she moved to Colorado in 2012. Before that, she worked at a small daily newspaper in South Dakota. It's the one with Mount Rushmore.